Boulder tax measures take step toward November ballot

Pot, roads, open space taxes get support from City Council

Boulder voters are likely to see a local marijuana tax, as well as a package that includes a sales tax for transportation and an extension and possible reallocation of open space taxes, on the November ballot.

They also may have to decide on several charter amendments and a fracking moratorium.

The Boulder City Council debated a long list of possible ballot measures Tuesday night. None of their decisions is final. Rather, they gave direction to the city staff about the ballot measures they'd like to formally consider in July.

Dozens of speakers called on the council to place one of two open space taxes that are set to expire in 2018 and 2019 on the ballot this year, but City Council members initially said there was too much confusion about the long-term funding needs for Open Space and Mountain Parks to make a recommendation. They asked for more concrete information about revenue projections and needs.

However, as part of the discussion of a transportation maintenance fee to be collected on utility bills, Councilwoman Suzy Ageton proposed combining an interim tax to support roads with an extension of one open space tax and a reallocation of the other. That proposal found support among a majority of council members.

Council members said they want to consider both sales and excise taxes on recreational marijuana, with some of the tax revenue dedicated to educational efforts to discourage drug use by young people and encourage responsible use by adults.

They proposed asking voters for permission to impose an excise tax of up to 15 percent and a sales tax of up to 10 percent. The actual tax rate would be set by the council and could be lower.

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The excise tax would capture revenue from the many grow operations that supply out-of-town dispensaries.

Medical marijuana dispensaries pay only regular sales tax.

That additional tax would be on top of a 15 percent excise tax and a 10 percent sales tax by the state, provided voters approve it.

City Manager Jane Brautigam cautioned that the city has to treat marijuana tax revenue as "one-time" funding because changes in federal enforcement could put an end to the industry.

"We can never count on the fact that they will keep coming in," Brautigam said.

Shawn Coleman, a consultant who represents the marijuana industry, said he was concerned about how high the suggested tax rate is.

"At those rates, it's a non-starter," he said. "The industry wants to be part of this discussion. We want to support a tax that goes in part to education, that includes adults, that includes responsible use."

Coleman said the industry would support a tax up to 5 percent.

Council members also supported two proposed charter amendments. One would allow for negotiated rather than competitive bond sales. Officials said negotiated sales can result in better rates for entities that don't have an established track record and high bond rating, such as a future municipal electric utility.

The Human Relations Commission has brought forward a charter amendment that would allow any Boulder resident, including non-citizens, to serve on city volunteer boards and commissions.

Voters may also see a charter amendment from a citizens' group that would require voters to approve the total debt limit and repayment amount of a municipal utility. Critics say it amounts to a second vote on municipalization, which was already approved by the voters in a narrow election in 2011.

A three-year fracking moratorium that could be extended may also appear on the ballot.

Several City Council members supported the idea of a transportation maintenance fee, which would be collected even on government entities like the federal labs and the Boulder Valley School District.

"We've been talking about deficiencies in transportation for years," Councilman Macon Cowles said. "This is a core need of the city. It will make our city easier to navigate."

But other council members said a fee that provoked strong opposition from the school district and the University of Colorado would face an uphill battle with voters.

Councilwoman K.C. Becker proposed asking voters to re-allocate some of the open space taxes for transportation, as well as other general-fund needs. That proposal had some support as well.

City transportation planners want to raise between $2.5 million and $5.6 million a year for pavement maintenance through a fee or tax on utility bills. Officials say the city is falling behind on road maintenance as sales tax revenue has declined and costs have risen.

The City Council will vote on specific ballot measures at its July 16 meeting.